ANALYSIS: Media Watch - Grande, Venti, Supersized? McDonald's triescafe business

Ronald McDonald in black-rimmed glasses and cargo pants? Not

exactly the image that comes to mind when thinking of McDonald's,

America's fast-food restaurant icon. McDonald's is betting on their new

concept for coffee, the McCafe, to help increase sales - but will it go

the way of the McPizza?



In covering McCafe's debut in the US, reporters most often played up

McCafe's international success, with 300 coffeehouses in 17

countries.



The media often commented on the lace curtains, comfy couches and fine

china on which patrons will savor their McPastries and sip their

McLattes.



The concept was often positioned as an attempt to shore up lagging sales

due to a saturated fast-food market and beef scares across Europe. But

is the company building on their strong brand, or simply grasping at

straws?



Journalists pointed out other McDonald's promising ventures such as a

diner prototype in Kokomo, IN, and the Boston Market chain. Said

McDonald's VP Rem Langan, 'Breakfast is an area of growth that continues

to be strong for us and this will also assist in helping to build our

business in all-day snacks' (National Post, May 1). Other media noted

past attempts to increase diversity into McDonald's which have failed.

'If McCafe fails to produce high-quality products, McDonald's will have

another flop to add to the junk heap, now littered with failed products

like McPizza and Arch Deluxe sandwiches,' wrote The Seattle Times (April

30).



Many media also wondered if Americans would give up their Venti

Frappacinos for a McCappucino. In the eyes of the Seattle

Post-Intelligencer (May 1), it seemed obvious the market at which

McDonald's was aiming - Starbucks, the 'fast food of coffeehouses.' The

prices of coffees, gourmet teas, fruit smoothies, pastries and scones at

McCafe were often pointed out.



Journalists made the distinction less often that these prices are lower

than those of Starbucks.



Hardcore coffee fans seemed mostly skeptical on McCafe's future. 'I

think they'll have image and ambience problems. (Gourmet coffee is) just

not McDonald's image,' said one Starbucks customer (Associated Press,

May 2). Regardless of image, some journalists felt McCafe's imported

Italian coffee just didn't differ enough from the usual fare at the

golden arches.



'If the java offered at Tuesday's press briefing is any indication,

Starbucks has nothing to worry about when it comes to those of us who

mainline caffeine,' said journalist Marcella Kreiter (UPI, May 1).



Analysts agreed that image might be a problem. 'Will the choice of the

McCafe name help or hurt? Does the company expect snooty gourmet coffee

drinkers to flock to something called McCafe? There are times I'm just

not in a McDonald's mood,' wondered Motley Fool.com columnist Chris

Rugaber (Yahoo News, April 30). McDonald's does, however, have

experience in the gourmet foods industry, with stakes in two UK

specialty sandwich and coffeehouses, Pret-a-Manger and Aroma. Because of

these concepts, other analysts were more optimistic. 'If it takes off,

it could be a great new thing for McDonald's.



It's a good complement to their existing restaurants,' said one analyst

(Pittsburgh Post-Gazette, May 2).



Current speculation notwithstanding, the lack of fanfare surrounding the

opening may be an indication that McDonald's is taking baby steps with

the first test of their concept cafe. Perhaps after the public has had

time to experience McCafe, the media will make a more solid conclusion

on the success or failure of the McVenture.



Evaluation and analysis by CARMA International. Media Watch can be found

at www.carma.com.



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